Samsung Denies Price Increase for Apple Chip Production
An unnamed Samsung official spoke with Seoul-based newspaper The Hankyoreh
to deny earlier claims that the company had forced a 20% hike on Apple, as noted previously this week
. The official reportedly claimed that Samsung’s prices “are set at the beginning of the year and aren’t changed easily.”
The original and now disputed reported cited an unnamed person that was supposedly familiar with negotiations between the two companies. The subsequent report also doesn’t feature a name or a direct quote from a Samsung official. Whether or not Samsung has actually raised its prices on Apple is uncertain as there appears to be a growing rift between the two companies as they both compete in the smartphone, computer and tablet spaces. We all know both Apple and Samsung are bitter rivals, despite Samsung being one of Apple’s largest suppliers.
For those of you who didn’t know, Apple’s custom-designed chips found in the iPhone, iPad, iPod Touch, and Apple TV are all built by Samsung at its chip fabrication plant in Austin, Texas. There have been several claims that Apple plans to move production from Samsung to Taiwan Semiconductor Manufacturing Co., but so far no action seems to have been taken. Samsung continues to remain the sole supplier of custom ARM-based processors for Apple’s mobile devices.
If Samsung ends up increasing the price it charges Apple for building its mobile processors, the change is expected to reduce the company’s overall margins by as much as 2% according to Gene Munster of Piper Jaffray. Munster also mentioned that it wouldn’t be a surprise if a price increase from Samsung turned out to be true considering all “the legal tension” between the two companies.
We'll have to wait and see what's true and what's not.
Source: The Street